Impact Investing: emerging Asian markets need more funding sooner to fight climate change and social challenges, conference hears

Climate finance is growing rapidly but it is not growing rapidly enough, International Finance Corporation executive says

Many Asian financial institutions, foundations and fund managers have recognised the commercial opportunities that impact investing offers: FSDC chairman

3-MIN READ3-MIN

A cement plant in Fuling county in China’s Chongqing. Most of the growth in heavy industries such as steel, cement and chemicals will take place in Asia and other emerging markets in the next few decades, the conference heard. Photo: Reuters

Published: 8:00am, 10 May 2023Updated: 1:46pm, 10 May 2023

Financing flows into emerging markets in Asia for meeting climate change and other social challenges are far from enough, and potential investors should not wait because both financial and social objectives can be achieved, an impact investing conference has heard.

Capital going to these countries for decarbonisation efforts and the strengthening of their infrastructure’s resilience against the impact of climate change is far from enough, said Hester DeCasper, head of East Asia and Pacific operations at International Finance Corporation, which provides financing to private-sector ventures with environmental and social objectives.

“Climate finance is growing rapidly, but it is not growing rapidly enough in the sense that we have a very limited time frame to avoid the worst impact of climate change … it is [also] not going to the markets where it is needed the most,” she told a conference co-hosted by Hong Kong’s Financial Services Development Council (FSDC) and the Global Impact Investing Network (GIIN) on Tuesday.

Greenhouse-gas emissions must peak within a few years and countries must implement deep across-the-board cuts to achieve the goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels to avoid catastrophic impact from climate change, according to scientists.

Most of the growth in heavy industries such as steel, cement and chemicals will take place in Asia and other emerging markets in the next few decades, which means tremendous investment opportunities can be found here, DeCasper said.